The key difference between ABN and ACN is that ABN is issued by the Australian Tax Office and is used for all types of businesses while ACN is issued by the Australian Securities & Investment Commission and is only used for registered companies.
ABN and ACN are two different numbers issued by different Australian Authorities and entirely for different purposes.
What is ABN?
ABN (Australian Business Number) is a unique number used in Australia. It is issued by the Australian Tax Office for businesses to use when dealing with the government, its agencies and other businesses. The ABN registration details become part of the Australian Business Register (ABR) maintained by ATO. It’s recommended by ATO to use ABN number in the invoices or other sales documents to avoid withholding amount from payments made for a business. ABN is a unique 11 digit number.
Uses of ABN
(1) Helps to claim GST (Goods and Services Tax) credits
(2) Helps to claim fuel tax credits
(3) facilitates a single business activity statement
(4) If ABN is not quoted PAYG withholding is possible
(5) Allow others to easily confirm your details for ordering and invoicing
Entitlement to an ABN
To be entitled to an ABN you must be:
- a company registered under corporations law in Australia
- a government entity, or
- an entity that is carrying on an enterprise in Australia.
A non-resident entity may be entitled to an ABN where:
- it is carrying on an enterprise in Australia, or
- in the course of carrying on an enterprise, it makes supplies that are connected with Australia.
While it is not a must to get an ABN number, it is needed for certain purposes such as GST registration.
If your business has an annual turnover of $75,000 or more, or if you are a non-profit organization with an annual turnover of $150,000 or more, then you must register for GST and to do this you’ll need an ABN.
Moreover, businesses that need to be endorsed as a gift deductible recipient or an income tax-exempt charity or both, require an ABN.
What is ACN?
Every company in Australia will be issued with a unique nine-digit number to identify businesses in Australia or businesses overseas under the Corporation Act 2001. The Australian Securities & Investment Commission (ASIC) only issues the Australian Company Number (ACN) to companies upon registration, after verifying identifications and other documentation.
Mostly ACN number will be printed on all documents lodged in ASIC: statement of accounting, receipts, invoices, purchase orders, business letterheads, official company notices, cheques, bill of exchange, bonds, agreements and some kind of advertisements.
How to Check Whether ACN Number is Correct?
ACN number is a nine-digit number in total but actual ACN is 8 digits and the last digit is a check digit to check whether ACN number is correct. (Material Courtesy: ASIC website)
Consider an ACN number: 009 249 969
|Digit X Weight||0||0||54||10||16||27||18||6|
Digit X Weight = Digit x Weight (i.e 6×1=6, 9×2=18)
Sum of the Products of Digit X Weight = 0+0+54+10+16+27+18+6 = 131
Remainder of 131 when divide by 10 = 131/10 = 1
Complement of the remainder to 10 = 10 -1 = 9
Therefore, ACN:- 009 249 96 9
What is the Difference Between ABN and ACN?
ABNs and ACNs are both business identification numbers issued by Australian government authorities, but for different purposes and by different departments. ABN (Australian Business Number) is issued by the Australian Tax Office while ACN (Australian Company Number) is issued by the Australian Securities & Investment Commission. ABN is used for all types of businesses, while ACN is only used for registered companies. This is the key difference between ABN and ACN.
While it is not a must for businesses to get an ABN number, it is needed for GST registration. ACN, on the other hand, is issued to companies automatically and must be displayed on certain documents. More importantly, ABN and ACN have some common identification; ABN is ACN plus a two-digit prefix.
Summary – ABN vs ACN
ABN (Australian Business Number) is issued by the Australian Tax Office while ACN (Australian Company Number) is issued by the Australian Securities & Investment Commission. ABN is used for all types of businesses, while ACN is only used for registered companies. This is the key difference between ABN and ACN.
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